The Business of Football: Would-be Reading owner speaks, sleepless in Swansea and a BBC boost

Rob Couhig has advised clients in thousands of legal disputes, argued cases in hundreds of courtrooms, bought and sold businesses, run a successful baseball team and taken former non-Leaguers Wycombe Wanderers to the second-tier Championship but he has never experienced anything like his attempt to buy Reading.

After months of difficult negotiations, the 75-year-old American’s takeover of the club in League One, the third division of English football, collapsed at the final hurdle in September, without any explanation from Reading or their Chinese owner Dai Yongge.

Since then, Couhig has not said anything publicly, politely declining requests for comment. Until now, that is.

“I have deliberately not said anything because I would still like to do the deal we agreed,” he told The Athletic.

“To this date, I have not been told why the deal wasn’t done. All the documents had been drafted and circulated by the sellers’ lawyers and they had been signed by every party, including the minority owners in Thailand, apart from Dai Yongge.

“I got up that Monday morning thinking it was finally the day when we would get the keys — I told my wife I would be off to England again. But I then saw an email from our lawyers saying the money we had loaned the club had been returned. No explanation, no thanks.”

The New Orleans-based lawyer suggested he and Reading should put out a joint statement but the club from London’s western commuter belt ignored him and issued their own, not that it told us much.

Over the past nine weeks, rumours have been aired on forums and podcasts that it was Couhig’s fault. The theory goes that he either annoyed Dai by acting like he was already in charge or he tried to knock money off the agreed price at the last minute, like a house-buyer who finds damp in the basement.

Couhig remains reluctant to get into the details, as he wants to honour the non-disclosure agreement he signed with the club and Dai, but he did not push back when The Athletic suggested he had agreed to pay £30million ($38m) for the club, with more than half of that sum being forwarded to Dai upon completion.

However, we have learned he also wanted to withhold some of the total payment as a form of insurance against any financial gremlins that might emerge later on. Couhig did not want to get into specifics but acknowledged “there was a reserve element to the price agreed because of potential undisclosed liabilities”.

Asked for his best guess as to why his deal did not go through, Couhig thinks his plans for the club spooked the current regime.

“Some people on the inside (of the club) could see there would be substantial change,” he said. “It’s a great club, with lots of good people, and we like the team and (head coach) Ruben (Selles), but it needs a managerial overhaul.”

Reading declined to comment.

And on the subject of his social media posts at the training ground and in a local bar somehow upsetting Dai, Couhig is very clear.

“It’s nonsense,” he said. “I came to Reading four times and in every instance we were encouraged by the club to give the fans some hope that things were happening with the sale. Frankly, we were told it would be good for me to post some pictures.”

In their statement on September 18, Reading said he and Dai had been “unable to find an agreement” and Couhig’s period of exclusivity had now expired. It added that the club would “pursue alternative options” and it soon emerged that they were in exclusivity with a new bidder, whose identity has been aggressively protected.

Couhig says he does not know who that is and there has been no attempt by the newcomer(s) to make contact with him. This surprises him as nobody has done more work on Reading’s complicated ownership structure than he has and he still holds the liens — a form of security over property assets — he attached to his pre-takeover loans of almost £5million.

Reading chief executive Dayong Pang has written to him about the liens, however, asking Couhig to release them. A request he rejected.

“I haven’t released the liens because the loans I made were integral to the sales process — I would not have loaned Reading if I didn’t think I was buying the club,” he explained.

“I also spent over £1million on this deal. We hired lawyers and accountants to do the due diligence. We even went to the trouble of setting up new companies in the British Virgin Islands to help them out with their (secured debt) problem with (Chinese bank) Haitong.

“Is it fair that I should be out of pocket? I don’t want to sound like I’m whining — what I really want is to do the deal — but I cannot release the liens even if I wanted to, because their lawyers drafted the documents and they are now in dispute with the club over their fees.”

British law firm Walker Morris has filed a winding-up petition against Dai’s holding company for his Reading shares over unpaid fees. It is the fourth such petition the club and Dai have faced since 2020, as well as several points deductions from the EFL for late payments.

And their problems are growing, as Couhig has started legal action of his own.

“I’m absolutely sure they breached my exclusivity by talking to others,” he said. “We have a claim but we’ve turned it over to our solicitors. I’ll leave it at that.

“I’m trying not to be controversial here but I’ve been doing deals for 40 years and I’ve never experienced anything like this before.”

Chinese businessman Dai bought Reading in May 2017, the same month they narrowly failed to achieve a return to the Premier League via the play-offs. Since then, however, the club have been hit with points deductions for missing payments, sold most of their best players, downgraded their women’s team, lost staff and been relegated to League One. It has been grim.

Forget Welcome To Wrexham, how about Escape from Swansea?

Having started with a story about an absence of business in football, let us move to an example of some bad business in football: the 2016 takeover of Swansea City by a group of U.S. investors led by Steve Kaplan, who owns a minority stake in the NBA’s Memphis Grizzlies, and Jason Levien, the co-chairman and CEO of MLS side D.C. United.

Swansea were nearing the end of their fifth consecutive season in the Premier League when Kaplan and Levien bought a majority stake in the Welsh club at a valuation of £110million. Unfortunately, they were relegated to the Championship in 2018 and have haemorrhaged money in that division ever since.

But now — for Kaplan and Levien, at least — the bleeding has stopped, as they have sold their 65 per cent stake in Swansea to three investors they first introduced to the club last year: Andy Coleman, Brett Cravatt and Nigel Morris.

A shareholder at D.C. United, Coleman has been Swansea’s chairman since May 2023, while private-equity firm boss Cravatt and Welsh-American fintech entrepreneur Morris have been on the board for over a year, too. Cravatt’s business partner Jason Cohen is joining the gang, too.

But you know all this because The Athletic reported it two weeks ago. What we did not report, though, is the exact terms of the deal, saying only that the “precise value was contested”.

Well, now we know, as one of several rather disgruntled fellow investors sent us the email Kaplan and Levien wrote to shareholders in Swansea Football Holdings, the club’s parent company, explaining why they were selling up and the deal they had secured.

They reminded everyone how relegation had seen the club’s income fall by 80 per cent, with parachute payments and wage cuts only partially offsetting the pain. Their woes were compounded by the £30million they wasted on transfer fees and three-year contracts for strikers Andre Ayew and Wilfried Bony, in a failed attempt to avoid the drop, and the impact of the pandemic.

There were two promotion play-offs appearances, including a defeat by Brentford in the 2021 final, but once the parachute payments stopped that summer it has been mid-table mediocrity and “substantial operating losses”.

In 2023, after “years of exhaustive searches for alternatives”, they brought in three new investor groups led by Coleman, Cravatt and Morris, in return for an equity injection of over £40million, and now, 18 months further on, “it is this group of investors who are purchasing our interests and committing to make another significant investment in the club”.

Before outlining the terms of the deal in an attachment to the letter, “Jason and Steve” said they had “spent many sleepless nights over the years” worrying about what to do, acknowledged “there are things we would have done differently”, but assured everyone they had “forgone all management fees owed to us since relegation”, before asking them to “take some solace in that we never burdened you with a capital call”.

“This is an outstanding group of partners,” they added. “It pains us that this investment did not work out financially.”

So, just how bad was it?

There are three parts to the deal.

The first is a commitment by the newish investors to fund the club with a minimum of £20million in new equity. The second is a series of share transactions that hand over control of Swansea City to Cohen, Coleman, Cravatt and Morris for the grand total of $3,000, or £2,370.

And the last is an “inducement agreement” between the club, on one side, and Kaplan, Levien and their investors, on the other, with the latter receiving an additional £10million for every season Swansea spend in the Premier League between now and May 2035, capped at a maximum of £40m.

Does that give investors a fair chance of getting some more money back or is it just condemning them to another decade of dashed hopes?

More Morecambe misery

As difficult as things have been at Swansea, they have been considerably worse at Morecambe, who are bottom of League Two, the fourth and last tier of English league football.

Never the biggest of EFL clubs, and rather fittingly nicknamed the Shrimps as a nod to the local fishing industry on the Lancashire coast in the north-west of England, Morecambe have been particularly hamstrung in recent years by their majority owners’ inability — or refusal — to fund them adequately.

This happens, unfortunately, but normally owners do what Kaplan and Levien did in south Wales: suck it up, sell the club and move on. The Bond Group, however, has spent the past 26 months trying to sell Morecambe to people who clearly cannot afford the inflated price the Bond Group wants.

For much of that period, the intended buyer was Sarbjot Johal, a 21-year-old from Birmingham, in the English Midlands, who claims to have made millions in soft drinks, property and crypto.

The Bond Group, where the sole director is a businessman called Jason Whittingham, eventually gave up on Johal ever being able to convince the EFL he had the money to run a club and moved on to a new mystery bidder.

In an interview with British radio station talkSPORT in June, Whittingham, who bought the club in 2018 with his business partner Colin Goldring, said he hoped to announce a sale to this bidder within two weeks (narrator: he did not).

The situation has been deteriorating at Morecambe for years, with the EFL docking the club three points last season for late payments to players and putting them under embargo for tax issues. This would have been alarming enough at any club but it caused real concern at Morecambe as the Bond Group’s first foray into professional sport had ended in 2022 with the bankruptcy of English rugby-union side Worcester Warriors.

The embargo has been lifted and they have so far managed to avoid any further disciplinary action this season but the club’s fans are thoroughly fed up with the Bond Group and its mystery bidder.

Last Saturday, there was a protest march to the home game against Port Vale, with black balloons released as the players took the pitch. And then, as the clock hit 26 minutes, fans turned their backs on the game for two minutes.

Unfortunately, that meant they had turned around again in time to see the visitors score on their way to a 1-0 win.

“The protest showed how important the club’s future is to the fans and the people of our town,” said Tarnia Elsworth, the chair of fans’ group the Shrimps Trust.

“This isn’t just about a team playing on a Saturday, this is about one man mishandling a community asset. Bond Group need to sell the club quickly — if the current interested buyers cannot provide the paperwork needed to the EFL, they need to move aside so the club can be sold to someone who can.

“Fan efforts will increase, this protest is just the start… pressure will continue until the club is sold to an appropriate new owner.”

The Athletic has tried to reach the Bond Group via the club but has not received any response.

Breaking news in BBC Sport (no, not that story)

Mark Chapman is the regular host of BBC Radio 5 Live’s Saturday football coverage (Richard Sellers/PA Images via Getty Images)

After three helpings of ownership woe, let us finish with some huge news about the BBC’s coverage of the Premier League and its implications for the British sports media industry. No, not that story.

Earlier this month, the Premier League announced it had sold its live radio rights to the BBC and talkSPORT. The agreement, which shared six packages of games between the two outlets over four years, starts next season.

So what, right? The radio rights are so much cheaper than the TV ones that the league never bothers even revealing a ballpark figure for the amount it receives for them.

But there was an interesting difference to the result of this auction as it has left the BBC with 65 live matches a season in the Saturday 3pm slot and talkSPORT with none. Everything else — talkSPORT getting the early Saturday kick-off and all non-weekend games; the BBC hoovering up the rest of the weekend — was the same as in the current deal.

This begged two questions: what is the BBC going to do with the second 3pm game and what is talkSPORT planning for Saturday afternoons?

Well, we asked and we were told that the BBC is going to broadcast one game on 5 Live, as normal, and the other on 5 Sports Extra, its digital sister station. And talkSPORT is going with an around-the-grounds offering led by presenter Adrian Durham, as well as commentary from games in the EFL, FA Cup, Women’s Super League and Premiership Rugby.

So, that’s two mysteries solved. Sorry, we have no idea who will be presenting Match of the Day next season.

(Top photo: Lee Parker – CameraSport via Getty Images)